In 2008, Dr. Elliot Fisher introduced the concept of an “Accountable Care Organization” during a meeting with the Medicare Payment Advisory Committee (MedPAC) in reference to a new payment arrangement where all providers share accountability for the continuum a patient’s care.
An Accountable Care Organization is a groups of doctors, hospitals, and other health care providers who agree to be paid under a reimbursement system that aims to incentivize high-quality coordinated care for Medicare Patients.
Kaiser Health News has a 3-minute informative introduction to ACOs:
There are two main problems facing the US health care system.
Medicare traditionally paid providers and hospitals through a Fee For Service (FFS) payment system. That is, payments are made to providers and hospitals for each service provided.
This creates an incentive to prioritize the quantity of services over the quality of services. As a result, we see duplicative services and poor coordination of care for patients, which ultimately lead to poor outcomes.
The following is a very pared down version of how ACOs
For more information, you can read about the full process from CMS’s MSSP Methodology